Insurance coverage – the spectre of bankruptcy

Feb 12, 2022 Editorial

Kaieteur News – We don’t have full insurance coverage in the event of a catastrophic oil spill from Exxon’s operations in our offshore oilfields. We don’t have it, and Guyana’s leading oil expert, its Vice President, seems unfazed by this menacing deficiency to our environment, our way of living, and the wellbeing of our people. Because a disastrous oil spill from those wells has the potential to spread to the other countries in the region, we could be on the hook for untold billions in liability, but for which we have nothing, no comforting insurance blanket. The Vice President, in his best imitation of a beggar, informed incredulous Guyanese that he is waiting for some kind of ‘acknowledgement’ from ExxonMobil, the parent company of the local Exxon subsidiary. We have this oil by the billions of barrels, and this is what we have come to: waiting for an acknowledgment.
Rather than giving the Vice President, the President, and the Minister of Natural Resources the severe verbal pummelling that all three deserve, we try another route today. This is so that our fellow citizens can appreciate what happens when there is a massive oil spill, with specific reference to what the leaders of Exxon do, the kind of sophisticated hardball games they play, notwithstanding that great damage was done (for which they were responsible), and that lives were subjected to the severest ruptures. It involved the Exxon Valdez and what happened, what Exxon did, and how it plays dirty and tricky. The purpose of which information is to alert Guyanese as to the possible perils in store, and the fate that we hope is never ours, but which could be engineered by our partners, ExxonMobil.
The Exxon Valdez ran into a reef in Alaska, and spilled 10 million gallons of crude oil into Prince William Sound. Marine life took a harrowing beating, tens of thousands of migratory birds died (plus another 400, 000), and scores of eagles. As we proceed to subsequent developments related to this calamity of an oil spill, we ask our fellow Guyanese to bear in mind that this oil spill occurred in America, not in some poor Third world country. If what followed could happen in America, then God had better watch out for Guyana, and its population of largely coloured people, who don’t count in the eyes of Exxon’s leaders.
After lengthy discussions with Alaska’s Governor, and to avoid Federal court proceedings that could lead anywhere and expose much about how the corporate superpower does business, Exxon agreed to pay a fine of US$100 million to misdemeanor charges and another US$900 millions to settle civil suits. The then-CEO of Exxon, Lawrence Rawl, next proceeded to boast that the settlement didn’t even dent Exxon’s earnings, and that the company’s shareholders would not feel any impact. Clearly, his priority and the concern of Exxon’s was for the company’s shareholders, with scant regard manifested about the wide sweep of damage inflicted on Alaskans, the environment, and the health and livelihood of many thousands.
The arrogance of Rawl and Exxon infuriated Federal Judge Russell Holland so much that he wasn’t open to letting Exxon off the hook so lightly, where its chiefs could turn around and crow how meaningless to the company’s profitability was that US$1 billion settlement. Exxon then withdrew its plea to the four misdemeanor charges, and decided to chance the Exxon Valdez case before a federal jury. The jury then lashed Exxon with US$5 billion in punitive damages, which was promptly appealed. In June 2008, the U.S. Supreme Court reduced the US$5 billion award for punitive damages, to a mere US$507.5 million, or a miserly 10 percent of the original amount. Lee Raymond, Exxon’s new CEO, was unrepentant, combative, and arrogant throughout.
We presented this high-level snapshot of the Exxon Valdez oil spill disaster, so that our fellow citizens could have a clear idea of how Exxon is (callous and unresponsive, regarding its failures), what its priorities are (profits and shareholders, by any means), and what it would do to win at any cost (legal, political, rarely ethical). We don’t have full insurance coverage. We could be impoverished forever, by our own hands, especially those of criminally negligent leaders.

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